OCR on hold for 2 years - what that means for your mortgage

Watch: With the official cash rate on hold until 2020 what will move your mortgage rate?

The Reserve Bank has kept the Official Cash Rate at a record low of 1.75 per cent.

It's now been two years since the last move.

It said it expects the rate to stay on hold until 2020 but has removed any explicit reference to a rate cut.

The previous two statements had been very clear that the next move for rates could be "up or down".

It was a subtle wording change from Governor Adrian Orr that may be interpreted as a more positive stance.

However, he also warned of that there were both "upside and downside" risks to growth and inflation projections.

"The pick-up in GDP growth in the June quarter was partly due to temporary factors, and business surveys continue to suggest growth will be soft in the near term," Orr said in his monetary policy statement.

"Employment is around its maximum sustainable level. However, core consumer price inflation remains below our 2 per cent target mid-point, necessitating continued supportive monetary policy.

"We will keep the OCR at an expansionary level for a considerable period to contribute to maximising sustainable employment, and maintaining low and stable inflation."

The kiwi dollar - which surged yesterday on strong jobs data - was largely unchanged, trading at around US67.84c

The Reserve Bank is charged with keeping annual inflation between 1 per cent and 3 per cent with a focus on the 2 per cent mid-point, and with supporting maximum levels of sustainable employment within the economy.

Official statistics yesterday showed unemployment at a decade-low 3.9 per cent.

Orr noted that petrol prices had pushed inflation up but said it would look through the short term spike.

"Higher fuel prices are boosting near-term headline inflation. We will look through this volatility as appropriate. Our projection assumes firms have limited pass through of higher costs into generalised consumer prices, and that longer-term inflation expectations remain anchored at our target."

More to come